CLOSE Shares advanced, capping a winning week, after investors took heart from reports the Obama Administration is working on a program to subsidise mortgage repayments for troubled US home owners, lifting local bank stocks.
The benchmark S&P/ASX200 index ended trading up 1.3%, or 44.8 points, for the day at 3559.1. The broader All Ordinaries index gained 1.1%, or 38.2 points, to 3496.7.
For the week, both indexes rose by about 2.6%.
Among the major sub-indexes, financial stocks today gained 1.8% while materials advanced 1% and energy shares added 0.5%.
The Australian dollar was recently buying 65.76 US cents, from 65.39 US cents at yesterday's close. It was also buying 59.85 yen and 50.87 euro cents.
Hopes that the US Government would shore up faltering mortgages helped spur Wall Street higher in the final hour of overnight trading.
Rio retreats
Rio Tinto shares fell after coming out of a trading halt this morning a day after the miner announced that China's state-owned Chinalco would pump $30 billion into the company to increase its stake to 18%.
Rio shares closed at $51.00, a fall of $1.00, or 1.9% as investors expressed their disappointment over the deal.
BHP Billiton shares were up 23 cents, or 0.7%, at $32.70, Fortescue Metals was up 25 cents, or 9.8%, at $2.81 and BlueScope Steel was up 3 cents, or 0.9%, at $3.33.
Financials higher
The Commonwealth Bank was up 45 cents, or 1.4%, at $31.40 and Westpac was up 30 cents, or 1.8%, at $16.95.
ANZ was the best performer on the market, rising $1.07, or 9%, to $12.96, while NAB gave up 15 cents, or 0.8% to $18.45.
Macquarie Group was up 68 cents, or 2.9%, at $24.08, while Suncorp Metway added 3 cents, or 0.5%, to $5.73.
Earlier, QBE Insurance was up 69 cents, or 3%, at $23.44 and IAG was flat at $3.47.
AMP shares were down 1 cents, or 0.2%, at $5.09 after this morning forecasting a profit downturn.
The gold miners were mixed, with the price of the metal falling $US6.94 to recently trade at $US941.26 an ounce.
Lihir Gold was down 2 cents, or 0.6%, at $3.39, while Newcrest was up 47 cents, or 1.4%, $34.47 after this morning announcing a 16% rise in profit.
Energy flat
The energy sub-index was flat earlier in the day, with crude oil last trading 46 US cents higher at $US34.44 a barrel.
Woodside Petroleum was down 8 cents, or 0.2%, at $32.07 and Santos was down 16 cents, or 1.1%, at $14.74.
AGL Energy was down 15 cents, or 1%, at $14.22 and Macarthur Coal gained 4 cents, or 1.4%, to $2.98.
The retailers were higher, with Woolworths adding 21 cents, or 0.8%, to $27.85 and Wesfarmers up 27 cents, or 1.71%, at $15.75.
Harvey Norman was up 5 cents, or 2.4%, at $2.14 and David Jones was up 5 cents, or 2.2%, at $2.35.
